BadCreditLoans - Home, Credit Related Questions

Why do insurers use credit?
Numerous studies have shown a very strong correlation between a consumer’s financial history and his/her future insurance loss potential. Thus, insurance companies believe the use of credit helps to underwrite an applicant at a cost that most accurately reflects that particular applicant’s specific risk.

Does the use of credit scores discriminate against some people or groups of people?
No. Because credit scores are based only on objective financial data and are not based on or affected by your race, age, gender, where you live, where you work, what your job is, how much you make, or whether you are disabled, the use of credit scores is not unfairly discriminatory.

What information is in a credit report?
Identifying Information - Name, Current and Previous Addresses, Social Security Number, Telephone Number, Date of Birth Credit History - History of satisfying obligations to retail stores, banks, finance companies and mortgage companies Public Records - Judgments, Foreclosures, Bankruptcies, Collections, Tax Liens, Garnishments Inquiries - Identifies credit grantors or other authorized parties that have received a copy of the consumer’s credit report, typically during the past 2 years. Also, lists companies who received consumer information for the purpose of offering credit or other promotions.

What is a credit score?
A credit score is a summary of credit characteristics taken from the applicants credit file data resulting in a three digit numeric score. All characteristics come from the trade line, public record and inquiry section of the credit report. The higher credit scores indicate better financial responsibility. The use of credit score minimizes the subjective nature of human interpretation of the lengthy credit report itself.

How does credit based scoring help consumers?
Companies can offer more products to more people. Since credit scores have been used, competition in the auto market has increased significantly, leading to more choices for consumers. Increased competition in the auto industry also enables financially responsible consumers to be rewarded with the best rates.

How can I correct my credit report information if it’s wrong?
Credit reports are generally accurate. However, mistakes can happen. If you discover a mistake in your credit report, all you have to do is contact the reporting agency and have the credit report corrected.